March 11 (Bloomberg) -- DNB ASA, Norway’s largest bank,
will increase prices on loans to pass on stricter rules the
government imposed to cool the housing market to clients.

Lending rates will be increased by as much as 30 basis
points on floating rate loans, parts of DNB’s loan portfolio for
small and medium-sized companies, and “a significant part” of
DNB Finans’ loan portfolio, Oslo-based DNB said in a statement
March 8. The new prices will be effective immediately for new
loans and for existing credit by the end of April, it said.

Norway is introducing stricter rules for its banks to cool
down the housing market and prevent a repeat of the 1990s crisis
that sent the country’s real estate prices plunging 40 percent.
The Finance Ministry in December proposed tripling the risk-weights banks need to hold on mortgage assets to 35 percent
after house prices and private debt burdens soared. It also
proposed introducing a curb on covered bond issuance.

Compliance Policy

China, Singapore Double Currency Swap Agreement to $48 Billion

China and Singapore doubled a currency swap agreement to
300 billion yuan ($48.3 billion) after the city-state became the
third offshore center for the Chinese currency last month.

Under the new arrangement, the funds will be available to
eligible financial institutions in Singapore and those operating
in China for a period of three years, the central banks said in
a statement March 7. China was the republic’s third-largest
trading partner after Malaysia and Europe in 2012.

The People’s Bank of China gave Industrial & Commercial
Bank of China Ltd. the right to clear yuan transactions in
Singapore last month, joining Hong Kong and Taiwan. London is
also in the process of arranging a currency swap with China as
it seeks to become an offshore yuan center in Europe.

Chinese Premier Wen Jiabao pledged to expand cross-border
use of the yuan and encourage foreign investment, as the
government plans to allow the budget deficit to widen by 50
percent in 2013 to spur economic growth. The new agreement was
signed on March 7 and will replace the previous arrangement
dated July 23, 2010, the central banks said in the statement.

The increased swap makes the Southeast Asian nation the
third-largest counterparty after Hong Kong’s 400 billion yuan
and South Korea’s 350 billion yuan out of the 18 countries with
which China has such lines, Kowalczyk wrote.

Singapore is the largest currency trading center in Asia
after Tokyo, according to the most recent triennial survey by
the Bank for International Settlements issued in September 2010.

EU Seeks Final Talks for Bank Capital, Bonus Rules on March 20

Irish diplomats and European Union lawmakers will meet on
March 20 to complete negotiations on legislation to toughen
capital and bonus rules for the banks.

Ireland, which holds the rotating presidency of the EU,
said last week that it will hold talks with the parliament to
flesh out details of the legislation, following a draft deal on
the measures that it struck with the assembly on Feb. 28.
Officials are seeking to wrap up talks this month, so that the
law can be formally adopted, according to an EU official.

Parliament lawmakers have insisted that the law, which
would apply capital and liquidity rules to the bloc’s 8,000
banks, include binding limits on bonuses. Under the draft deal
struck with Ireland last month, bankers would be banned from
receiving discretionary pay worth more than twice their base
salary, with a special accounting treatment applied to parts of
the bonus that are deferred for at least five years.

Asia-Pacific Policy Measures Curb Inflows, Adjust Exchange

Asia-Pacific policy makers from March 2012 have taken a
variety of policy measures to cool property prices, curb capital
inflows, and adjust foreign-exchange rules.

For a timeline of the measures as compiled by Bloomberg
News, click here.

Parliament Repeats Demands That Osborne Toughen Banking Bill

The parliamentary commission scrutinizing a bill designed
to make Britain’s banks safer demanded for a second time that
Chancellor of the Exchequer George Osborne toughen the
legislation.

Osborne should threaten to break up the entire banking
industry if it doesn’t comply with rules to protect retail
operations, the Parliamentary Commission on Banking Standards
said in today’s report in London. The cross-party panel demanded
19 changes to the bill, including one that regulators get
immediate powers to set higher leverage ratios.

The report is the second attempt to toughen the proposed
laws after Osborne rejected previous recommendations. It sets up
the government for criticism during a second reading of the bill
in Parliament later today.

Osborne last month made a partial concession to the panel’s
demands for a reserve power to break up the banking industry
along retail and investment banking lines if it fails to adhere
to laws aimed at protecting taxpayers from future bailouts. He
said individual banks, rather than the industry, could be broken
up under that scenario after earlier voicing opposition in
November during a clash with members of the 10-member committee.

Osborne himself appointed the panel last year to look at
conduct in the financial-services industry following the Libor
scandal and subsequently asked to lead the pre-legislative
scrutiny of the banking bill.

Successive witnesses at the panel’s hearings have expressed
concern that the government’s proposals will be diluted by the
banks before they are properly implemented.

For more, click here.

Compliance Action

MarketAxess Seeks CFTC Exemption Easing Shift to Dodd-Frank Rule

MarketAxess Holdings Inc., the electronic trading platform
for bonds that is expanding into swaps, is asking the top U.S.
derivatives regulator for an exemption to ease its transition to
Dodd-Frank Act rules.

The New York-based company, which facilitates trading of
credit swaps tied to indexes of securities, said a limited
exemption should be granted by the Commodity Futures Trading
Commission because it is already regulated by the Securities and
Exchange Commission and Financial Industry Regulatory Authority.
Proposed CFTC rules would mean high compliance and surveillance
costs for so-called swap execution facilities, MarketAxess Chief
Executive Officer Richard M. McVey said March 7. An exemption
would increase competition between trading platforms because it
would lower costs, McVey said.

The CFTC and SEC are writing Dodd-Frank rules for swap
execution facilities that compete with exchanges, including
those operated by CME Group Inc. and Intercontinental Exchange
Inc., for trading of interest rate, credit and other swaps. The
rules are meant to reduce risk and boost transparency after
largely unregulated swaps helped fuel the 2008 credit crisis.

The five-member CFTC has been negotiating since late last
year on final regulations for trading platforms. The agency has
yet to schedule a vote on the rules to govern trades by firms
such as JPMorgan Chase & Co. and Goldman Sachs Group Inc.

MarketAxess said in a Feb. 21 letter to the CFTC that it
intends to formally request a conditional exemption under Dodd-Frank.

Bloomberg LP, the parent company of Bloomberg News, has
said it intends to register with the CFTC as a swap-execution
facility.

EU Libor Cases May Last Longer Than Those in U.S., Almunia Says

European Union antitrust probes into whether banks and
brokers manipulated benchmark lending rates such as Libor “may
last longer” than those in the U.S., EU Competition
Commissioner Joaquin Almunia said.

While U.S. authorities can strike plea bargains with
individual companies, the EU must deal with all companies at
once, he said in a speech in Brussels March 8.

While U.S., British and Swiss authorities have already
closed their cases with three large European banks in the so-called Libor scandal, the results of EU probes into a suspected
cartel involving a large number of banks and brokers “will be
announced in due time,” Almunia said.

Settlement cases take an average of three years after a
company first reports a cartel to regulators, Almunia said,
while standard cartel cases take around five years.

Financial regulators in the U.K. and the U.S. have already
imposed more than $2.5 billion in fines on Barclays Plc, UBS AG
and Royal Bank of Scotland Group Plc, and are investigating
other companies.

The EU can levy fines of as much of 10 percent of a
company’s yearly global revenue for each cartel in which they
participate.

Turkey Competition Board Fines 12 Banks 1.12 Billion Liras

Banks in Turkey received collective fines of 1.12 billion
liras after the Competition Board in Ankara found them guilty in
a probe into alleged collaboration in setting interest rates,
deposit rates and credit card fees, according to a board
decision published March 8.

The probe related to activities that took place between
2007 and 2011.

Intrade Halts Service on Possible Financial Irregularities Probe

Intrade, an online service that lets people bet on events
including elections and the weather, ceased trading activity,
saying it is investigating possible financial irregularities.

The service provider has settled open positions, and
stopped banking transactions for company accounts, Intrade said
in a statement on its website. It didn’t give details of any
irregularities and said it took the actions in accordance with
Irish law. The company’s parent, Trade Exchange Network Ltd., is
based in Dublin.

In November, Intrade asked U.S. clients to close their
accounts after the Commodity Futures Trading Commission sued the
website for allegedly offering improper options trading. Trade
Exchange in 2005 agreed to pay $150,000 to settle allegations it
illegally offered contracts in the U.S., including some based on
the price of gold, crude oil, the euro and the yen.

Intrade held members’ funds of $5.7 million at Dec. 31,
2011, and had net assets of $1.9 million, according to accounts
filed with Ireland’s corporate regulator.

Courts

Absolute Capital’s Homm Said He Had Cash in Underwear, Fled

The German fugitive hedge fund manager who more than five
years ago fled the Spanish island of Mallorca with $500,000
hidden in his underwear and luggage faces U.S. charges after his
arrest at the Uffizi Gallery in Florence.

Florian Homm, 53, was taken into custody by Italian police
at 12:30 p.m. on March 8 at the world-famous museum.

The arrest, by Homm’s own account as well as that of U.S.
prosecutors, followed his 2007 decision to leave behind a life
of wealth and castles. During his escape, he held a Liberian
diplomatic passport as well as German and Irish passports,
according to the Federal Bureau of Investigation.

Homm is accused in a criminal complaint filed March 6 in
federal court in Los Angeles of defrauding investors in hedge
funds he controlled, causing $200 million in losses. He is
charged with four counts of conspiracy, wire fraud and
securities fraud. He faces as long as 75 years in prison if
convicted on all counts.

The founder and former chief investment officer of Absolute
Capital Management Holdings Ltd. is accused of “cross trading”
billions of shares of penny stocks between the company’s funds
to boost the value of the otherwise illiquid securities.

The trades, through a Los Angeles-based broker-dealer that
Homm co-owned, generated fees for Homm and Absolute Capital and
also inflated the price of Absolute Capital’s shares, U.S.
prosecutors said. Homm “dumped” his shares and resigned from
Absolute Capital on Sept. 18, 2007, “in the middle of the
night,” according to the U.S.

Homm and his co-conspirators made more than $53 million
from the scheme, prosecutors said. Thom Mrozek, a spokesman for
the U.S. Attorney’s Office in Los Angeles, didn’t immediately
return phone and e-mail messages yesterday seeking comment on
the case.

Adam Kravitz, a Miami lawyer who represents Homm in a
lawsuit brought by the U.S. Securities and Exchange Commission,
declined to comment on the criminal charges.

Homm recently published a book in German called “Rogue
Financier: The Adventures of an Estranged Capitalist,”
according to the affidavit.

The case is U.S. v. Homm, U.S. District Court, Central
District of California (Los Angeles). The SEC case is Securities
and Exchange Commission v. Ficeto, 11-cv-01637, U.S. District
Court, Central District of California (Los Angeles).

For more, click here.

Interviews

Senator Brown, Pawlenty Discuss Bank Regulation

U.S. Senator Sherrod Brown, an Ohio Democrat, talked with
Bloomberg’s Peter Cook about regulation of U.S. banks and his
and Senator David Vitter’s bipartisan bill to force banks to set
aside even more capital than currently required.

Tim Pawlenty, chief executive officer of the Financial
Services Roundtable and former Minnesota governor, discussed
bank regulation. Rajiv Shah, administrator of the U.S. Agency
for International Development, talked about U.S. foreign aid.
They spoke on Bloomberg Government’s “Capitol Gains.”

For the video, click here.

Comings and Goings

Senator to Play Offense for NFL Saints Against SEC Nominee White

Senator David Vitter, a Louisiana Republican, plans to
cross-examine Mary Jo White this week about her assessment of
wrongdoing by New Orleans Saints players and coaches in the
National Football League team’s “Bountygate” scandal. White,
nominated by President Barack Obama to lead the Securities and
Exchange Commission, was retained by the NFL in 2011 to review
evidence that team paid players to injure opponents.

The probe resulted in the suspension of several key
defensive players and coaches, including Saints head coach Sean
Payton. The players’ suspensions were overturned last year on
appeal. The Saints didn’t recover from the suspensions,
finishing with a 7-9 win-loss record in 2012, one year after
going 13-3. The team won Super Bowl XLIV in 2010.

Vitter, in a statement, described White’s work for the NFL
as “botched.”

The three-member arbitration panel that overturned the
players’ suspensions faulted NFL Commissioner Roger Goodell for
his handling of the discipline. It didn’t address White’s review
of the facts or the quality of the investigation.

Vitter’s staff says he plans to ask White how many of the
NFL’s cooperating witnesses actually mentioned a “pay for
injury” program, and if any of them had an interest in
verifying the league’s claims.